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Abstract

An increase in farm size plus vertical integration of several food industries stand on the verge of changing the structure of agriculture. This potential is greatest in more developed countries. The broiler industry was the first to be vertically integrated. This has been followed by many of the specialty crops and is currently spreading to livestock. As consumer demand for food in many countries is limited to a slow population growth, food processors are establishing market position by introducing a stream of new and specialized products. They compete by competitive pricing, which is achieved by controlling the entire production process from the farm to the consumer. These firms and the fast food industry put foods on the market that are tasty, quality consistent, and price competitive. They add value to basic farm commodities which in many instances provides more profit than that made from commodity production.

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